Sharon P. Talbot v. Margaret A. Rosenbaum

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2014
SHARON P. TALBOT,
Appellant,
v.
MARGARET A. ROSENBAUM,
Appellee.
Nos. 4D11-4338 and 4D12-4312
[July 23, 2014]
Consolidated appeals from the Circuit Court for the Fifteenth Judicial
Circuit, Palm Beach County; Lucy Chernow Brown, Judge; L.T. Case No.
501997CA010567XXXXMB.
Lawrence U. Taube of the Law Office of Lawrence U. Taube, West
Palm Beach, for appellant.
Albert J. Piantini of Piantini and Associates, P.A., Coral Gables, and
Andrew M. Kassier of Andrew M. Kassier, P.A., Coral Gables, for appellee.
CIKLIN, J.
Sharon Talbot, the defendant below, appeals several orders of the trial
court, including a default and default final judgment awarding damages
to the plaintiff, Margaret Rosenbaum. Talbot raises three issues on
appeal, one of which we determine merits discussion. Talbot contends
that the damages alleged in Rosenbaum’s complaint were unliquidated
therefore requiring a hearing to determine the proper amount. We agree.
The underlying action for conversion and replevin arose from Talbot’s
acquisition of property that was originally purchased with the proceeds
of a $75,000 loan made by Rosenbaum to a third party. According to the
complaint, Rosenbaum lent the money to the third party, an owner of a
Miami sports memorabilia business. The loan was intended to
financially assist the third party with the purchase of equipment and
inventory for the memorabilia store. The loan was memorialized in a
security agreement upon which the owner/third party defaulted shortly
after its execution. The defaulting third party then moved all of the
inventory and equipment to Palm Beach County, and gifted it to Sharon’s
Sportsplex, Inc., which he co-owned with Talbot. Talbot placed the
inventory and equipment in a storage facility and refused Rosenbaum’s
repeated demands for possession of the property.
After litigation commenced, it was discovered that Talbot disposed of
the property. Because of “willful and repeated violations” of various
discovery rules and a court order, the trial court exercised its discretion
and struck Talbot’s pleadings. Rosenbaum eventually moved for a
default and default final judgment and therein sought liquidated
damages in the amount of $75,000 exclusive of interest, costs, and
attorneys’ fees. The trial court granted Rosenbaum’s motion and entered
a default final judgment against Talbot in the amount of $76,800 in
compensatory damages, plus pre-judgment interest.1
Talbot contends that the trial court erred by characterizing the
damages as liquidated and awarding damages without conducting a
hearing to determine the value of the property at issue. Rosenbaum
counters that argument and contends that the damages amount was
liquidated because the court could determine that Talbot owed
Rosenbaum $75,000 for the conversion count “with exactness.”
Whether damages alleged are liquidated or unliquidated is a question
of law subject to de novo review. See R & B Holding Co. v. Christopher
Adver. Grp., 994 So. 2d 329, 331 (Fla. 3d DCA 2008) (noting that the
proper method of computing damages is a question of law). Although
Talbot failed to raise the issue of unliquidated damages below, “the
setting of unliquidated damages without the required notice and without
proof is regarded as fundamental error.” Cellular Warehouse, Inc. v. GH
Cellular, LLC, 957 So. 2d 662, 666 (Fla. 3d DCA 2007) (citations and
quotation marks omitted). Because fundamental error may be raised for
the first time on direct appeal, Sanford v. Rubin, 237 So. 2d 134, 137
(Fla. 1970), this court may review Talbot’s unliquidated damages
argument.
Liquidated damages are those that “can be determined with exactness
from the cause of action as pleaded.” Matejka v. Dulaney, 40 So. 3d 865,
866 (Fla. 4th DCA 2010) (quoting Bowman v. Kingsland Dev., Inc., 432
So. 2d 660, 662 (Fla. 5th DCA 1983)). “When the complaint alleges only
general damages without demanding a specific amount” and a default
judgment is entered, “damages are deemed unliquidated.” Watson v.
1The final judgment does not explain or otherwise account for what appears to
be an “extra” $1,800.
2
Internet Billing Co., 882 So. 2d 533, 534 (Fla. 4th DCA 2004) (citations
omitted). As this court has previously stated:
“A default admits a plaintiff’s entitlement to liquidated
damages under a well-pled cause of action, but not to
unliquidated damages.” Bodygear Activewear, Inc. v. Counter
Intelligence Servs., 946 So. 2d 1148, 1150 (Fla. 4th DCA
2006) (citing Bowman v. Kingsland Dev., Inc., 432 So. 2d 660(Fla. 5th DCA 1983)). As a result, ‘“[a] defaulting party has a
due process entitlement to notice and an opportunity to be
heard as to the presentation and evaluation of evidence
necessary to a judicial interpretation of the amount of
unliquidated damages.’” Id. (quoting Asian Imports, Inc. v.
Pepe, 633 So. 2d 551, 552 (Fla. 1st DCA 1994)). “[D]amages
are not liquidated if a court must consider testimony or
evidence ‘to ascertain facts upon which to base a value
judgment.’” Id. (quoting Bowman, 432 So. 2d at 662).
BOYI, LLC v. Premiere Am. Bank, N.A., 127 So. 3d 850, 851 (Fla. 4th DCA
2013) (quoting Minkoff v. Caterpillar Fin. Servs. Corp., 103 So. 3d 1049,
1051 (Fla. 4th DCA 2013)). In other words, entry of a default judgment
does not deprive the defendant of the right to a hearing to determine
damages which are not unliquidated. Matejka, 40 So. 3d at 866.
Although Rosenbaum argued that the subject $75,000 loan within her
complaint against Talbot was sufficiently specific, the damages sought
were not liquidated. Rosenbaum did not seek a precise amount of
damages in the complaint; she demanded “judgment” against Talbot,
“[a]n award of compensatory damages, with interest,” and “other relief as
the court deems proper,” as well as writs of replevin.
Furthermore, even if Rosenbaum had included in her complaint a
prayer for damages in the precise amount of $75,000, such damages
could still not be considered liquidated. To constitute liquidated
damages, the proper amount to be awarded must be determinable “with
exactness from the cause of action as pleaded, i.e., from a pleaded
agreement between the parties, by an arithmetical calculation or by
application of definite rules of law.” Bodygear, 946 So. 2d at 1150
(citations omitted). Rosenbaum never alleged that Talbot was directly
liable to Rosenbaum under the third party loan agreement. Rather, she
loosely alleged that the loan proceeds were used to purchase property
which eventually came into the possession of Talbot.
As the prevailing party in a conversion action, Rosenbaum is entitled
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to a damage award amounting to the market value of the subject
property on the date of the conversion plus interest accruing from that
date. See Exxon Corp. v. Ward, 438 So. 2d 1059, 1060 (Fla. 4th DCA
1983) (citing Gillette v. Stapleton, 336 So. 2d 1226, 1227 (Fla. 2d DCA
1976)). Because evidence must be presented to establish the value of the
property on the date of conversion, the damages alleged by Rosenbaum
in her complaint are, by definition, unliquidated. See Heritage Circle
Condo. Ass’n v. State, Fla. Dep’t of Bus. & Prof’l Regulation, Div. of
Condos., Timeshares & Mobile Homes, 121 So. 3d 1141, 1144 (Fla. 4th
DCA 2013) (explaining that damages are not liquidated if testimony must
be taken to ascertain their exact sum and that defendant would be
entitled to an evidentiary hearing on damages).
We reverse the portion of the default final judgment awarding
unliquidated damages and remand the matter to the trial court for
further proceedings to determine the proper amount. On all other issues
raised, we affirm.
Affirmed in part, reversed in part, and remanded with directions.
MAY and KLINGENSMITH, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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